The organisation that represents local councils across England has issued a plea to the Government to address a £452 million funding gap to keep free bus passes alive. The Local Government Association -which represents 315 of 317 councils in England – said its members reported having to spend nearly half a billion pounds last year to plug the shortfall to keep free bus passes going.
It said its analysis showed this came “at the expense of lower fares and other transport services to help more people into work and boost growth”. The LGA said councils had used an estimated £452 million from “already overstretched” budgets to meet the cost of the passes, which give older and disabled people free off-peak travel on local bus services.
Councils in England are legally obligated to administer the national scheme and are responsible for reimbursing bus operators for journeys made by those with a pass. The £452 million funding gap is the difference between the funding councils receive from government for the scheme, compared to the actual number of journeys made in 2024/25, the LGA explained.
Further, it said discretionary bus services – such as free peak travel, community transport services, reduced fares and school transport – have had to be scaled back by local authorities across the country for them to top up the statutory national scheme from their discretionary budgets.
The LGA is now calling on the Government to use the upcoming Spending Review “to provide long-term, consistent, funding for local bus services and plug the gap in the scheme, which could lead to better bus services for all, including free and discounted fares for young people and other groups”.
It said better local public transport “can support the Government to achieve economic growth and opportunity, by encouraging more people into work, training or education, especially those in the lowest income groups who are least likely to have access to a car”. It added that streamlining existing, multiple bus funding pots into a single fund “would also lead to more reliable services and help to kickstart growth”.
The LGA said the Government had recently provided “much-needed” extra funding for the next year to protect routes and keep fares down, including the £3 fare cap. The LGA says this laid the foundations to boost growth through long-term, fully devolved funding for local transport and highways in the upcoming Spending Review, in line with five-year funding settlements for Network Rail, National Highways, and Metro Mayors.
Cllr Adam Hug, transport spokesperson for the LGA, said: “Free bus passes provide a vital lifeline for many in our communities, allowing vulnerable residents to go shopping, visit family and friends and attend appointments. Councils want to keep this scheme running but cannot keep having to find nearly half a billion pounds a year from their own overstretched budgets to make up the shortfall, money which instead could be used to help other people in need to get to work or college.
“By using the Spending Review to plug this gap and give councils the long-term funding they need, we can help government meet its own objectives of breaking down barriers to employment and opportunity, while boosting inclusive economic growth.”